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Illinois' Interchange Fee Prohibition Act doesn’t ban or
restrict credit card swipe fees, but it limits banks from
charging interchange fees on tax and tip transactions.
Restaurant organizations have now filed legal briefs against the
law, and Illinois U.S. Senator Dick Durbin, D-Springfield, has
filed a brief in support of the law.
“Both the Durbin Amendment and the IFPA take important steps to
rein in debit interchange fee collusion that card networks like
Visa and Mastercard facilitate on behalf of their card-issuing
financial institutions,” Durbin’s lawyers said in a court
filing.
Machalagh Carr, director of the Center for Legal Action for the
American Free Enterprise Chamber of Commerce, said it is
alarming that a senator from the Land of Lincoln is seeking to
take the state back to a Civil War era patchwork of banking, but
she is confident the law will be thrown out.
“There’s a strong chance that the law will get struck down, that
would be ideal,” said Carr. “Not only do I think on a macro
level that this is a bad idea for a free market economy, but on
a micro level, this particular law is unworkable and easier to
make the case that this should not be left in effect.”
Last month, Carr's group filed an amicus brief in the ongoing
lawsuit against the law, outlining what they called the
“devastating damage” posed to the debit and credit payment
system in the United States.
The Office of the Comptroller of the Currency, an independent
bureau of the U.S. Department of the Treasury, has also filed an
amicus brief against the law, saying it's "misguided" and will
leave national banks with "extraordinary operational burdens."
The law was backed by the Illinois Retail Merchants Association
and is the first such statute in the country, is scheduled to
take effect next July. |
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